Sony isn't cutting the price so dramatically without giving up features, however. The new hardware will not have the multi-memory card port, it will feature two USB ports instead of four, and, most surprising of all, the system won't feature backwards compatibility with PlayStation 2 games of any kind.

In the past Sony has made changes to the hardware configuration of the PlayStation 3, resulting in some loss of compatibility with older games, but taking away PlayStation 2 support altogether is a move that's very out of character for the company. Sony states that this move is "reflecting both the reduced emphasis placed on this feature amongst later purchasers of PS3, as well as the availability of a more extensive line-up of PS3 specific titles." If the backwards compatibility was indeed handled by software in later revisions of the PlayStation 3, adding it into the 40GB model would have been a no-cost feature. Is it possible that even after the first hardware changes were made, there was hardware needed for backwards compatibility to be effective, and that too has since been removed to cut costs? The other possibility is that Sony has removed the feature in order to artificially inflate the "value" of higher-priced models. Time for the conspiracy theorists—and the hardware hackers—to dig deeper once the hardware is in the wild.

The price of the existing 60GB "Starter Packs" will be cut to €499 and will be on sale "while stocks last." This will be the first time the hardware has received a price cut in Europe, and this all but confirms the rumor of the 40GB model coming to the US with a $400 price. Sony's sales have yet to gain momentum in the United States, even after the first price drop, and an even more competitive price going into the holiday season could give the PlayStation 3 some much-needed buzz. It remains to be seen how gamers will react to the complete lack of backwards compatibility.

Sony knows it needs to make changes to stay competitive in this generation, and this new movie is a bold one. We'll see how energized gamers become from this new model when it launches in five days.